The XRP market has experienced one of the most extreme liquidation imbalances in the last day, with liquidations of long positions totaling $7.18 million.
Liquidation Imbalance in the XRP Market
In the last 24 hours, $7.18 million in long positions were liquidated in the XRP market, while short positions remained largely untouched at just $738,000. This created an almost 1000% imbalance. Although XRP dropped about 4%, this is not significant for the crypto market.
Comparison with Other Cryptocurrencies
Other major cryptocurrencies also saw liquidation volumes rise, with Ethereum and Bitcoin experiencing liquidations of $50.34 million and $35.62 million respectively. However, neither approached the level of imbalance recorded for XRP.
Reasons for the Sharp Imbalance
The sharp imbalance is attributed to an overabundance of positions opened in the bullish direction, leading to a lack of support when the market slightly retraced. This reflects a typical scenario characterized by high optimism and insufficient downside protection. The liquidation gap occurred not due to extreme volatility but because traders were overexposed in one direction.
The sharp liquidation imbalance in the XRP market highlights the importance of prudent risk management and caution in the face of excessive optimism.
